Naming and shaming the way to pay equity

Progress towards pay equity is stalling. Is mandatory reporting the way forward?

While the gender pay gap in Australia is at an all-time low, progress is slowing, according to Bankwest Curtin Economics Centre and Workplace Gender Equality Agency’s (WGEA) Gender Equity Insights 2023: Accelerating the Pace of Change report.

The report exposed who has been doing the heavy lifting and what a more equitable future will require.

Unequal contributions

Advances in gender pay equity are not equally shared.

Those businesses that undertook a pay gap audit in the past two years saw more than double an increase in the rate of change towards pay equity as compared with those who did not.

The greatest disparity between high performers and low performers was from the mining, manufacturing, and retail trade industries, as well as the professional, scientific, and technical services sectors.

“For example, the most advanced businesses in the mining sector are seven times more likely to set targets to reduce gender pay gaps and four times more likely to report pay equity metrics to senior executives compared to businesses that are early on in their journey towards workplace gender equity,” said Professor Alan Duncan, Bankwest Curtin Economics Centre director.

The most successful 25 per cent of businesses reduced gender pay gaps by at least 5.4 per cent over the past three years, while the worst performers saw rises of at least 4.8 per cent.

What works?

The report found that audits and greater reporting transparency will be crucial in addressing the pay gap.

While around 50 per cent of businesses conducted a pay gap analysis in the past year, only one-tenth report pay equity metrics to their executives and boards.

Gathering the data is one thing; acting on it is another.

“When organisations implement pay equity audits and report gender pay metrics to their senior leadership and governing boards, we see a greater pace of change,” said Professor Duncan.

“International experience indicates publishing the individual gender pay gap results of companies is an important step that can accelerate change,” said Mary Wooldridge, WGEA chief executive.

Promisingly, the federal Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023 will do just this by enhancing pay gap reporting requirements.

The report also found that the strongest performers took steps towards enhancing parental leave for secondary and primary carers.

“Employers who do more, achieve more,” said Ms Wooldridge.

Looking forward

The report concluded that organisations should consider the following in progressing towards pay equity:

1. Tackle gender balance.
2. Implement pay equity action plans.
3. Increase equality at the board level.
4. Ensure equal access to top-paying roles.
5. Get non-managers involved in the process.
6. Commit to sustained action.
7. Plan for improvements, stronger actions, and higher standards.
8. Consult with employees.

At the heart of effective reform is greater representation.

“Gender diversity in decision making and on boards is a key driver of organisational change,” said Associate Professor Astghik Mavisakalyan, report co-author.

“While there’s been progress in the past three years, employers must keep up the pace to avoid leaving women underrepresented in the boardroom for decades to come.”

The report emphasised the need for faster change. Holding organisations accountable will be crucial in getting there.

“Industry averages can mask the true picture of progress. Publishing employer gender pay gaps offers a deeper insight into industry performance and business performance that may have been hidden by averages in the past,” said Ms Wooldridge.

To understand how Australia’s pay gap progress measures up, click here.